Nasdaq 100: Alphabet Jumps 4% on Earnings Surprise, Massive Buyback Ignites Bullish Sentiment

Alphabet Surges on Earnings Beat, $70 Billion Buyback and Dividend Boost

Alphabet (GOOGL.O) reported better-than-expected first-quarter earnings, bolstered by continued growth in digital advertising and robust profitability. The tech giant also announced a $70 billion stock repurchase plan and a 5% dividend hike, sending shares up 4% in after-hours trading and adding roughly $75 billion to its market value.

Strong Advertising Core Offsets Cloud Miss

Alphabet’s total revenue rose 12% year-over-year to $90.23 billion, surpassing Wall Street’s $89.12 billion estimate. Advertising remained the core driver, with ad revenue increasing 8.5% to $66.89 billion. Though a deceleration from last quarter’s 10.6% rise, the results beat the Street’s 7.7% forecast. The “Search and other” unit alone posted $50.7 billion in revenue, up from $46.16 billion a year ago. Despite geopolitical and macroeconomic pressures, including cautious corporate spending tied to trade concerns, digital ad demand proved resilient.

Cloud Growth Slows but Margins Improve

Google Cloud’s revenue rose 28% year-over-year to $12.26 billion, just shy of expectations at $12.27 billion. While growth moderated from the previous quarter’s 30.1%, profitability improved sharply — cloud margins expanded to 17.8% from 9.4% a year ago. This shift signals stronger cost discipline and maturing infrastructure efficiency, important factors as Alphabet competes in the enterprise cloud market.

Earnings Surge on Higher Profitability and Investment Gains

Net income soared 46% to $34.54 billion, or $2.81 per share, crushing the consensus estimate of $2.01. Results included $8 billion in unrealized gains from non-marketable equity securities, tied to a private company investment. Core operational efficiency also contributed to the earnings beat, reinforcing Alphabet’s ability to generate strong cash flows amid uneven performance in smaller business units like Waymo and Verily, which posted a $1.23 billion operating loss.

Market Forecast: Bullish

Alphabet’s performance reinforces confidence in its core advertising model, even with soft patches in cloud and YouTube revenue. The sizeable buyback and dividend increase underscore management’s confidence in sustained cash generation.

With improving cloud margins and resilient ad demand, the stock outlook remains bullish in the short term, especially with investor appetite high for tech names showing profitability and capital return discipline.

More Information in our Economic Calendar.